Hook Reversal in Cotton From Oversold
May cotton turned higher after breaking key support at 78.30, which is a 50% correction of the July 24-February 25 rally. The market turn higher from an extreme oversold technical condition and the turn higher in the US stock market, some weakness in the US dollar and a sharp rally in crude oil were all seen as positive forces.
Cocoa prices have been weighed down by near-term demand concerns for several weeks, but they finished last week’s trading with two positive daily results in a row as they climbed back above their 200-day moving average. Unless global risk sentiment can end the second quarter on an upbeat note, cocoa may have trouble extending its recovery move.
Several commodities have been negatively impacted by the prospect of lower near-term demand, one of which is coffee. While those demand issues are unlikely to be resolved soon, coffee continues to have a bullish supply outlook. For the week, May coffee finished with a loss of 0.50 cent.
Since reaching a multi-year high in mid-February, sugar prices have lost nearly 13% in value as they continue to be pressured by weakness in key outside markets. This has led to the sugar market falling into oversold price levels. For the week, May sugar finished with a loss of 57 ticks which was a fifth negative weekly result in a row.
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